i think it is not bug.. the skill working as it was intended

No 1, due to madara barrier 2+ which will trigger at round 2.. during this barrier activated any elemental skill except water (ie, fire, wind, lightning, earth) will cause irremovable poison

No 2, due to hiruzen edo passive five style ninja enhancement.. it has all 5 element

since his passive affecting all your lineups, so this passive causing non-water elemental skill to all of them causing all your lineup getting the irremovable poison

u can try other formation, using madara barrier while activated, then causing elemental damage to opponent (try in kakashi test)

while madara barrier activated:

i try hiruzen edo mystery (is has all 5 elements) to kakashi.. all hit by mystery have irremovable poison

i try suigetsu mystery (it has water element only) to kakashi.. no irremovable poison

u can try other ninja

good luck :)